Apple is going to miss its revenue targets for the current financial quarter, and the company says the coronavirus outbreak is to blame for expected iPhone supply shortages.
In a statement posted today (Feb. 17), Apple warned that it wouldn't "meet the revenue guidance we provided for the March quarter." A few weeks ago when announcing its holiday sales, Apple told Wall Street analysts that revenue for the quarter ending this March would range between $63 billion and $67 billion. Had Apple been able to pull that off, that would have been growth of 9% to 16% over the year-ago quarter.
So what changed between that forecast and now? Put simply, the coronavirus outbreak, which has killed 1,775 people and resulted in more 71,000 reported cases, according to a site tracking the disease.
The coronavirus situation is affecting Apple in a couple different ways, the company said. First, factories in China where the iPhone is assembled have been slow to reopen after the Lunar New Year holiday as China deals with the coronavirus situation. That's gong to impact supples of Apple's smartphones, which means lower sales for the quarter.
"While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated," Apple said in its statement. "The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues."
The coronavirus outbreak is also hurting iPhone sales within China. Out of concern for the disease's spread, Apple has closed all of its stores in China. Many partner stores are closed too, and the ones that have opened are seeing less business.
"We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can," said Apple in its statement, adding that iPhone demand is on target in other regions.
Apple's revenue warning comes at the same time the company could be gearing up to produce a successor to the iPhone SE. A report that also came out today suggested that the iPhone SE 2 was still on track for a March release. A new rumor points to a March 31 unveiling for the new iPhone, with the iPhone SE 2 hitting stores in early April.
Apple isn't the only tech company that's being impacted by the coronavirus, which also figures to slow production of other electronics made in China. Additionally, last week, organizers behind this month's Mobile World Congress canceled that trade event, where many new smartphones are unveiled.